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An electric vehicle means a vehicle that is powered exclusively by an electric motor instead of a combustion engine. The electric traction motor uses a large traction battery pack. The battery pack must be plugged into a wall outlet or charging equipment.Electric vehicles are now becoming a trend among several auto buyers. They are not only better as compared to gasoline-powered cars but also environment-friendly. Also, with the rising petrol and diesel prices, buying an electric vehicle seems to be the best option. These are cost-effective at the same time you can be eligible for tax benefits under. income tax Section80EEB of theIn the Union Budget 2019, the government of India announced an incentive for the purchase of an electric vehicle. The budget further stated that the advanced battery of the e-vehicles will be incentivised. With the introduction of the new Section 80EEB, taxpayers who have taken a loan for buying an e-vehicle will be able to get a tax deduction on the interest paid for the loan.In order to be eligible for the tax benefits under Section 80EEB, individual taxpayers need to fulfil the following conditions:
- The loan needs to be sanctioned between the period 1stApril 2019 and 31stMarch 2023
- The loan should be taken from a bank or NBFC
- The deduction shall not exceed Rs.1.5 lakh
- The loan should be solely taken for the purchase of an electric vehicle
- Only interest component will be considered for a tax deduction
- The tax benefit is limited only to individuals. However, if the individual runs a business and the vehicle will be used for business purposes, then the tax deduction can be availed. In such a case, the e-vehicle needs to be registered in the name of the owner or in the name of the business. Also, the individual cannot claim the deduction since the vehicle will be already claimed as a business expense.
It is important to note whenever you are filing an income tax return ; you should obtain the interest paid certificate, tax invoice and loan documents. Keep them in handy at the time of ITR filing.Ready to make the most of your money? Start your tax planning journey now!
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.